Cipharm: Overview of the Pharmaceutical Industry in Côte d’Ivoire

Interview with Ibrahim Diawara, President and CEO of Cipharm

What is your evaluation of the Ivorian pharmaceutics sector in general?

In terms of medical imports, Côte d’Ivoire requires a budget of more than 100 billion CFA francs and 94% of our medicines are imported. The local pharmaceutical production represents just 6%, so you can see that there certainly is room to grow!

The long standing Côte d’Ivoire pharmacists and six French laboratories founded Cipharm in 1988. We recuperated the unit in 2006 after the departure of Sanofi, which had become the only shareholding laboratory of Cipharm. As of 2006, I as a pharmacist myself, have been directing this organisation. We were given a first class organisation and now it is up to us today to proceed with its development.

You mentioned that there is a huge need and market for local pharmaceutical production. In legal terms, how can the government aid the local production of pharmaceutics?

Many countries such as the North African countries and even countries that entered the European Union not that long ago – like Spain and Portugal for example – have all said that locally produced products ought to be somewhat protected. In my opinion, this protection allows local production to advance. The idea is that all imports in these countries should promote local production. So quite simply, foreign products are not allowed to enter, which has allowed the industry to increase its range.

We do not want to ask for direct aid from the government. There is an established black list but it is not entirely respected in Côte d’Ivoire. Countries such as Nigeria and Ghana are doing this; even Senegal, which does not have an industrial infrastructure equal to Côte d’Ivoire, is doing this and has some level protection for local manufacturers.

How many manufacturers are there here in Côte d’Ivoire?

There are about five or six manufacturers, three of which I would say are of good scope.

Are you the leading manufacturer?

Yes, we are number one in terms of turnover because we export our products. On a local level, we are positioned as number two because OLEA has a large local production and manufactures on site. We are number one in terms of overall production because we manufacture the widest range of products. We do not yet manufacture injectable medications, but we are going to manufacture them soon. We produce tablets, gels, creams, syrups, etc. We have the capacity to manufacture all of these products locally, even antibiotics.

Therefore, you have taken on a high tech pharmaceutical company and you can manufacture all kinds of generic products, which allows you to supply the population with quality medication at good prices.

Yes, that is our objective and in fact, our slogan is exactly that: “quality medication at affordable prices”.

What has been the response from the population of Côte d’Ivoire, and indeed in other francophone countries, to generic medications made in Côte d’Ivoire?

We have had no problems in this sense because the consumers in this domain are very well directed to the dispensaries that receive our products and distribute them properly. There are no concerns in this aspect.

Why is it that just 6% of medicines here are made locally? Is it because people choose imported products or is it because the quantity that you can manufacture is limited and therefore the others can sell more?

In the dispensaries, there are more than 6,000 different references. We produce just 60 forms of products, so in reality just thirty odd products and that is not enough. That is a real problem but we also face the challenge of competition coming from imported products. The big names are present in Côte d’Ivoire and they have better means of promoting their own goods than we do. Therefore, we need to see the basic medicines that have simple bases such as paracetemol in tablets, effervescent tablets or syrups left to local production. For example, we also produce some anti-malaria tablets; we manufacture the same products as the big names but their power and ability to reach the prescribers is ten to fifteen times greater than ours.

As I said, in terms of acceptance we have had no problems. Often the prescribers do not even know that these medicines are manufactured in Côte d’Ivoire. We produce some traditional products under the Sanofi license and often the prescribers and doctors who have been prescribing these medicines for years are surprised to find out that they are produced here in Côte d’Ivoire, in Abidjan. We run caravan campaigns to try to reach the doctors and prescribers to build up this awareness.

The problem clearly lies in the fact that we have very strong competition. We do not have the support that would allow us to increase our collection and our range of products. We need to increase our range but in actual fact; there is not a huge number of essential products listed by the World Health Organisation. I would say that there are perhaps a hundred or so essential products, not 6,000. There are some countries, which from the very beginning blocked the influx of unnecessary products.

Thus, if we limit ourselves to manufacturing these essential products, with what we earn we might be able to increase our production capacity, fully use our manufacturing facility and improve the quality of our services.

Are you organised for lobbying activities?

Recently we have become organised. There is an association of local manufacturers that is called the APPCI (The Association of Pharmaceutical Producers in Côte d’Ivoire) which works very hard to update and inform the authorities by working together. We have had many meetings. Even on a DPM (Department of Pharmaceutics and Medicines in Côte d’Ivoire) level, a group works towards the promotion of local production. We have held workshops and seminars; we have held all sorts of meetings, all of which have been well listed but unfortunately, for the time being, it has not seemed to have done much good.

Is this the case regardless of who is in government?

Yes, this is the case regardless of who is in government. In my opinion, I do not see much of a political desire to help us in this sense. The tools are in place, the Ministry and the Prime Minister along with the allied parties and partners, etc. I personally attend all of the meetings organised by the government to try to make our voice heard. However, I still think that there has been no real work done to improve our situation.

We come under the jurisdiction of three Ministries: the Ministry of Commerce, the Ministry of Industry and the Ministry of Health. We have met with Mr Billon the President of the Chamber of Commerce many times. I have attended many meetings organised by the Chamber of Commerce over the years.

Recently an investment fund has invested in Cipharm. How did this fund come about? What was the procedure?

We put forward our idea to launch a third unit regarding the injectable medicines that I mentioned earlier. Of course, we needed investment for this. We needed an investment of 6.2 billion CFA francs for this project to be able to go ahead. Thus, we needed to find that money and this is where Cauris Management has invested.

I spoke with a financial advisor; there are financial brokers here nowadays that can look for financing and investors. I also visited the banks because Cauris is not the only investor. Cauris Management got involved in a framework of capital increase. We need 6.2 billion CFA francs and Cauris Management has invested close to 1.8 billion CFA francs globally. There is 1.2 billion CFA francs in equity from the current account of associates. Whilst two local banks, the BACI (Banque Atlantique de Côte D´Ivoire) and the BCBAO have invested the remaining 4.5 billion CFA francs. So we have our financing, we are paying our providers and we are going to start the project this July.

So, you are embarking on a new phase.

For me, it is a new phase because the presence of Cauris gives us a bit more credibility in terms of finances. In fact, the banks invested because Cauris had invested. One of the banks actually required the presence of Cauris. Today they help us with our management because obviously we have to continue managing our business very well. We have regular sessions with them exchanging information. Cauris represents about 22% of the capital.

Thus, thanks to the increased production you will be able to reach more of the Ivorian market and also more foreign markets in the region.

Yes, of course. We are going to increase the range of products on a local level because this is completely necessary. In terms of exports, we cover practically all the countries in the Francophone African region and according to the statistics our products do well in all of these countries.

In your opinion, how much will this deal increase your turnover?

We aim to double our turnover by 2020. Today our turnover is 5 billion CFA francs and so we hope to have a minimum turnover of 10 billion CFA francs by 2020.

Are there still opportunities for other investors to get involved?

We are open to offers from investors. Obviously, we discuss things with Cauris. You know that in this business there are some very big players and the standards change very quickly. This means that in this industry we are always looking for investment. We constantly need both expertise and financial investment. Therefore, yes we are open to investors. We don´t follow any kind of nationalistic protectionism in this sense. We work will all those who can offer us better know-how and finances to advance in this industry. It would be good to be able to manufacture at least 40% or 50% of our pharmaceutics; that would be for the good of Côte d’Ivoire.

Why should a foreign investor interested in coming to Côte d’Ivoire right now, invest with you? What is your competitive advantage?

When something is manufactured on site, it becomes accessible. The population of Côte d’Ivoire is growing; it is now around 24 or 25 million. Therefore, the demand is growing. People are becoming more and more educated and they have more access to healthcare. This means that the market is growing. Obviously, imports come at a cost when you take into account costs for transport and duties for transit and customs, etc. In this sense, it is easier today to manufacture and deliver on site to the local distributers. I would say that this is a blessing for us.

The presence of foreign investors and foreign pharmaceutical laboratories will also allow them to manufacture their own products locally and to sell them locally. This also depends on rules being put in place by the ECOWAS (Economic Community of West African States).

With Senegal, Ghana and Nigeria all having much stricter regulations in terms of medications, we believe that some medications will be sold more in the ECOWAS in the coming three or four years. Thus, we need the laboratories who sell their strategic products locally, to manufacture them on site.

What is your vision for the company in the next 2 or 3 years?

Well, I have the goals for 2020 in mind. My dream is to manufacture all of the products in the range today. Notably concerning the older units, I would like to improve them and eventually have the WHO approval and certification. That is very important to me, so that we can face the international demands made by NGOs, etc. I would like us to be the best in terms of quality.

Regarding the new unit, I would like us to be able to manufacture our medications and to show everyone that we are capable of producing high tech products, particularly injectable medications that are somewhat more sophisticated than ‘dry’ products.

What is the WHO certification?

There are procedures put in place by the WHO and by the DPM here. We have been working by these guidelines for years but the certification requires quite a bit of money. The regulations for a factory built in 1988 are obviously not the same as the regulations nowadays and will not be the same as those of 2020 so we need to work on this. It will require more investment and new investors. We are not going to finish the development for the injectable products and then sit back and relax. I hope to increase capital in the coming years and develop the company to be a medium sized company and then even further. That is my dream.

I want to be able to leave our young pharmacists a viable national production company. Even if there are multiple shareholders, I would like to have a top quality establishment in Côte d’Ivoire.

 

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